Starbucks at a Glance Starbucks started in 1971 at Seattle by JerryBaldwine, Zev Seigle and Gorden Bawker .

. Basicaly a retail chain of coffee, tea and spices. four stores in Seattle and profitable since itsopening Zev Seigle left the company in 1980 to pursueother interests. Mainly USP was the quality of Coffee offered tothe customers. Howard Schultz, vice president and generalmanager of U.S operations for a swedish maker of Stylish chicken equipment and coffeemakers metwith the partners of starbucks in 1981 and afterunderstanding the company wished to joinstarbucks. Schultz and Starbucks Schultz mainly focused on the expantion of starbucks outside seattle. He joined strbucks in the four stores in seattleworking behind the counters , tasting differentkinds of coffees, talking with the customers ,getting to store personel, and learning theretail aspects of the coffee business. Become CEO of the company and turn aroundthe entire scenario of doing business of starbucks. Mainly focused in expansion plans and employee management

Que-1 what are the key elements of starbucks strategy as of 2004? Does thecompany have a clear strategic intenseaccording to chapter 2. Key elements. Expansion plans to open 1300 new outletsworldwide . To achieve comparable sales growth of 3 to7%. Revenue expected to grow by 20% annually. Net earning by 20-25 % annually. Strategic questions been considered What could starbucks do to make its store morerewarded welcomed and surprised customers. What new products and new experiences couldstarbucks provide that would uniquely belong to beaasociated with SB? How to reach those customers who dont drinkcoffee. What are the new strategic paths should starbuckpersue to achieve its objectives of becming the mostrecognized brand in the world.

STRATEGIC OBJECTIVES

TO BUILD A COMPANY THAT VALUED AND RESPECTED ITSPEOPLE , THAT INSPIED THEM , AND THAT SHARED THEFRUITS OF SUCCESS WITH THOSE WHO COTRIBUTED TO THE COMPANYS LONG TERM VALUE . MANAGEMENT EXPECTED TO HAVE 15000 STARBUCKSSTORES BY YEAR ENDED 2005 & 25000 LOCATIONS BY2013 . SCGULTZ DECIDED TO MAKE BUILDING A NEWRELATIONSHIP OF MUTUAL RESPECT BETWEEN EMPLOYEES& MANAGEMENT A PRIORITY . FINANCIAL OBJECTIVES THERE IS NO NEED TO SEE FINANCIALOBJECTIVES AS STRATEGIC OBJECTIVESCLEARLY DEFINES THE FINANCIAL OBJECTSWHICH ARE DIRCTLY OR INDIRECTLY BEHIND THE STRATEGIC OBJECTIVES . LOSSES GIVEN BY HOWARD WE HAVE TO ATTRACT A MANAGEMENT TEAM WELL BEYOND OUR EXPANSIONNEEDS . WE HAVE TO BUILD WORLD CLASSROASTING FACILITY . WE NEED COMPUTER INFORMATIONSYSTEM SOPHISTICATED ENOUGH TOKEEP TRACK OF SALES IN HUNDREDSAND HUNDREDS OF STORES . Que-5 what are the key policies practices andprocedures that underline how howard schultz andstrategic mgt have implemented and executed thechosen strategy? On becoming the CEO of the company the vision of the starbucks wasto make it a national company with guiding principles that employeescould be proud of . Schultz restored the old and honest employees of starbucks to give thebest service to the customers.

 Dave Lawrence was hired as a executive vice presented and chargedwith leading operation, finance and human resources. New logo was invented to match the culture of the starbucks andGiornale. New espresso machines were equipped and look more Italian than oldworld nautical Chicago store opened in October 1987 as per expansion strategy Identifying inability of the customers for having a cup of coffee in thewinter season in Chicago, schultz solved the problem of freshness andquality assurance by putting freshly roasted beans in special flavorlock bags that used vacuum packaging technique. Portland, oregon was the next market the cmpany entred. Entered in L.A in late 1991. Opened 15 new stores in 1988, 20 in 1989, 30 in 1990, and 53 in 1992,producing a total of 161 stores in US. Also went for franchising concept to retrieve the cost for new storeexpansion. In order to make starbucks a great place to work schultz accepted toexpand healthcare coverage to include part-time workers. To oversee the expansion process starbucks created zone wise vicepresidents to direct the development of each region and to implantthe starbucks culture in the newly opened stores.

 Starbucks had created a new subsidiary, starbucks coffeeinternational, to orchestrate overseas expansion and build thestarbucks brand name globally via license. To accommodate its strategy of rapid store expansion, starbucks put insystems to recruit, hire and train baristas and store managers. In august 2002 starbucks teamed up with T-mobile USA, the largestcarrier-owned WiFi services, to experiment with providing internetaccess and enhanced digital entertainment to patrons at over 1200starbucks locations. CURRENT RATIOS

THE CURRENT RATIOS SHOWS THE COMPANYSABILITY TO PAY DEBT IN SHORT TERM & IS GOING TO BE IDLE ONE WHICH IS 2:1 . THE CURRENT RATIO SUGGESTS THAT THE COMPANYIS FINANCIALLY VERY SOUND AS THE ASSET RATIOIS FAVOURABLE FOR THE COMPANY . THE COMPANY IS UTILIZING THE CURRENT ASSETPROPERLY . What recommendations would youmake Howard to sustain thecompanys growth and supportcontinued strong financialperformance in the year ahead? Starbuck should allocate more of its budget towardsadvertising for building the brand along with directmarketing. Starbuck should look for new product throughinnovation and target new market segment thatprovide unique association among them. Star buck should target new market segment thatprovide unique association among them.

 The company should maintain the balance betweenthe amount of dividends to be paid and to bereinvested in the business. Starbuck should buy back its outstanding share frommarket. Star buck should used its d/e ratio in a proper manner HEALTHCARE BENEFIT TO PART TIME WORKERS Cost of the benefit to company - $1500 peremployee Cost of Hiring & Training new employee - $3000 peremployee Part time employees who are working more that 20hour per week 75% of the premium by Starbucks Extended Health coverage - Preventive care, Crisiscounseling, Dental care, Eye care, Mental health Other Fringe Benefits.. Medical insurance Dental and vision care Life insurance

Sick time Paid vacations Free pound of coffee each week 30% product discount

Opportunitiesdrive thru Key elements of star buck's strategy : To expand its business internationally. To recruit the people who are passionateabout coffee and provide them a skilfultraining which familiarize them withcompanys value principle and culture.

To experience the people with a unique storeambience. To provide wider product line by offering vastrange of coffee beverages. To open up franchise along with starbucksown store in various countries Companys strategic intent : To establish starbuck as a mostrecognised and respected brand in theworld.

To open the new stores worldwide inorder to increase the revenue and marketshare. Setting objectives To open 1300 stores worldwide. To achieve sales growth of 3% to 7% thatcould grow revenues by 20% per annum andnet earning by 20-25% annually for next 3 to5 years. To recognise that profitability is essential tofuture success. Crafting strategy

To expand its business internationally. To develop a customer satisfaction bybuilding the brand loyalty through persuadingstarbucks exacting standards of quality andflavour. To source greater range of coffee varieties tocustomers from multiple geographic areaswhich reduces the risk of weather, price andchanging economic conditions. Implementing andexecuting the strategy

Entered into franchise and licensing agreements toenter into global market. Employed the persons who were knowledgeableabout the products, who eagerly communicated thecompanys passion for the coffee and who possessedthe skills and personality to deliver customer services. Company gave the employees their chance to share inthe success of the company in order to makeharmonize relationship between the management andits employees